Bitcoin’s recent price action has been nothing short of encouraging, but there is a wealth of on-chain data offering deeper insights beyond the market buzz. By analyzing metrics that measure network activity, investor sentiment, and BTC market cycles, we can get a clearer picture of Bitcoin’s current state and potential trajectory.
A lot of upside left
MVRV Z-Score Bitcoin’s market cap, or price multiplied by circulating supply, compares to its realized cap, which is the average price at which all BTC were last transacted. Historically, this metric indicates overheated markets when entering the red zone, while the green zone suggests extensive losses and potential undervaluation.
Currently, despite Bitcoin rising to new all-time highs, the Z-score remains in neutral territory. Z-scores reached a high of 7 to 10 in previous bull runs, far higher than the current level of about 3. If history repeats itself, this indicates significant room for further price increases.
Miner’s Profits
Puel multiple Evaluates a miner’s profitability by comparing their daily USD-valued revenue to their last one-year moving average. After the halving, miners’ earnings fell by 50%, leading to a multi-month period of reduced earnings as the BTC price rallied for most of 2024.
Yet even now, as Bitcoin reaches new highs, the multiple shows only a 30% increase in profits compared to the historical average. This suggests we are still in the early to mid phase of a bull market, and when comparing the patterns in the data we think we have the same potential for explosive growth as 2016 and 2020. And finally the reclamation of the 1.00 multiple level which indicates the exponential phase of the price action.
Measuring market sentiment
Net Unrealized Profit and Loss (NUPL) The metric measures the overall profitability of the network, mapping sentiment into phases such as optimism, trust, and happiness. Similar to the MVRV Z-score in that it is derived from a fair value or investor cost-basis, it looks at the current expected profit or loss for all holders.
Currently, Bitcoin remains in the ‘belief’ zone, far from ‘euphoria’ or ‘greed’. This is consistent with other data suggesting that there is considerable room for price appreciation before market saturation is reached. Especially considering this metric is still at a low compared to the metric it reached earlier this year in March when we set the previous all-time high.
Long term bearer trend
The percentage of bitcoins held for more than a year, represented by 1+ year HODL waveremains unusually high at around 64%, which is still higher than at any other point in Bitcoin history prior to this cycle. Earlier price peaks in 2017 and 2021 saw these values fall by 40% and 53%, respectively, as long-term holders began to realize profits. If something similar were to happen during this cycle, we still have millions of bitcoins to be transferred to new market participants.
So far, only about 800,000 BTC have been transferred Long term holder supply New entrants to the market during this cycle. In previous cycles, between 2-4 million BTC changed hands, highlighting that long-term holders have yet to fully cash out. This represents a relatively recent phase of the current bull run.
Tracking the “smart money”.
The Gone are the days of coins The metric weights transactions by the holding period of the coins, with an emphasis on whale activity. We can then multiply that value by the BTC price to see that time Value days destroyed (VDD) multiple. This gives us a clear understanding of whether the biggest and smartest BTC holders are starting to realize the profits in their positions.
Current levels are usually far from the red zone seen during market tops. This means that the whales and the “smart money” are still not liquidating a significant portion of their holdings and are still waiting for higher prices before making significant gains.
conclusion
Despite the rally, on-chain metrics overwhelmingly suggest that Bitcoin is far from overheated. Long-term holders remain largely stable, and indicators like MVRV Z-score, NUPL, and Puell multiple all highlight room for growth. That said, some profit-takers and new market participants signal a mid- to late-cycle phase shift, which could likely last through most of 2025.
For investors, the key step is to stay data-driven. Emotional decisions driven by FOMO and complacency can be costly. Instead, follow the underlying data that drives Bitcoin up and use tools like the metrics mentioned above to guide your own investing and analysis.
For a more in-depth look into this topic, check out a recent YouTube video here: What’s Happening On-Chain: Bitcoin Updates
